Interim report, January 1 – March 31, 2014

New geographic market, growth and strong cash flow
Summary of first quarter 2014

  · Net sales amounted to SEK 411.4 M (370.7), up 11 percent.
  · EBITA rose to SEK 34.3 M (28.6), an EBITA margin of 8.3 percent (7.7).
  · Operating profit increased to SEK 26.4 M (23.3), an operating margin of 6.4
percent (6.3).
  · After-tax profit for the period increased to SEK 19.2 M (18.1).
  · Earnings per share after dilution amounted to SEK 0.65 (0.64).
  · Cash flow from operating activities amounted to SEK 71.8 M (45.6).
  · The Board of Directors proposes an unchanged dividend of SEK 2.25 (2.25) per
share.
  · Adjustment of growth target. The annual net sales growth will amount to at
least 10 percent.

  · After the end of the period an agreement has been signed to acquire Symetri,
with annual revenue of SEK 80 M. The acquisition will open up a new geographic
market for Cad-Q and the Addnode Group. There are conditions connected to the
acquisition, which is expected to be implemented in May.

CEO’s comments
Growth, stable margins and strong cash flow
We continue to do good business in most of our areas in a relatively weak
economy. We started 2014 with 11-percent growth and an EBITA margin of 8.3
percent – somewhat better than the year-earlier period. The growth, which is
both organic and acquisition-related, varies within our business areas and in
various geographic markets. The Design Management business area had 16-percent
growth in the quarter, which was largely due to the acquisition of Joint in
2013. In the PLM business area, organic growth was 10 percent, with much
stronger profitability compared with the year-earlier period. The Process
Management business area had growth of 10 percent, but a slightly weaker margin.
We have not yet achieved the desired profitability in the Content Management
business area, but have recognized the first positive EBITA for the business
area since the fourth quarter of 2012.
Cash flow from operations during the first quarter was much stronger than
revenue generated. Our seasonal pattern entails that a large proportion of our
licensing transactions, but mainly our annual recurring support and maintenance
agreements, are invoiced in the fourth quarter and paid by customers in the
first quarter. This generates very strong cash flows in the first months of the
year and low working capital requirements for the full year.
Acquisition opens up a new geographic market
We have, in April, signed an agreement to acquire Symetri, which has annual
revenue of SEK 80 M. Symetri has a strong position in the UK market and is the
largest Autodesk distributor to the manufacturing and oil and gas industries in
the UK. We will, through the acquisition, introduce our product portfolio and
service offering and our experience of selling to global customers in the UK.
This is the first step in an expansion into a market that is expected to be one
of Europe’s most rapidly growing economies in 2014. The acquisition, which is
expected to be implemented in May, is conditional upon certain events.
Staffan Hanstorp, CEO and President
The information in this Interim Report is such that Addnode Group must disclose
in accordance with the Swedish Securities and Clearing Operations Act and/or the
Financial Instruments Trading Act. The information was released on April 25,
2014 at 08:30.
For more information please contact:
Staffan Hanstorp
CEO and President
Phone: +46 733 772 430
E-mail: staffan.hanstorp@addnodegroup.com
Johan Andersson
CFO and IR
Phone: +46 704 205 831
E-mail: johan.andersson@addnodegroup.com
About Addnode Group AB
Addnode Group provides mission-critical IT solutions to selected markets in both
private and public sectors. We acquire, build and manage companies that deliver
mission-critical IT solutions for the specific needs of our clients. Every day,
250,000 engineers use our systems to develop and maintain products, buildings
and facilities. 100,000 civil servants in the public sector use our solutions
for municipal and state administration.
We are 950 employees in Sweden, Norway, Finland, Denmark, Serbia, India and USA.
In 2013 net sales totaled SEK 1 444 M. Addnode's Series B share is listed on the
OMX Nordic List, Small Cap. More information about Addnode Group on
www.addnodegroup.com.